The agreement, under which Wave will advance up to five nucleic acid programs from discovery through clinical candidate selection, could yield up to $871 million in milestone payments plus tiered royalties from Pfizer, which has an option to exclusively license each program for further development and commercialization. In a parallel agreement, it also includes rights for Wave to Pfizer's high-affinity liver-specific targeting technology, an approach that is significantly more specific than GalNAc.
Under terms of the deal, $30 million of Pfizer's investment arrives in the form of equity in Wave, at a price of $16 per share. Morris Birnbaum, senior vice president and chief scientific officer of Pfizer's cardiovascular & metabolic research unit, told BioWorld Today that "for something this early, the rationale is so compelling. The Wave folks clearly know this chemistry better than anyone else."
Given that the partners are "really carving out a narrow part of drug discovery," it also just made sense for them to establish the parallel part of the agreement covering Pfizer's hepatic targeting technology, he said. If Wave chooses to pursue that, Pfizer would be eligible to receive potential development and commercial milestone payments as well as tiered royalties on sales of any products including the technology.
The collaboration with Wave complements other work Pfizer is pursuing in the metabolic space, including its May 2014 agreement to explore the relationship between the trillions of microorganisms comprising the human microbiome and obesity and metabolic disorders. The company and its peers hoping to turn the tide of metabolic disease have their work cut out for them. In 2011-2012, nearly 35 percent of all U.S. adults and 50 percent of those 60 or older were estimated to have a metabolic syndrome, a combination of conditions that includes obesity, high blood pressure, type 2 diabetes and poor lipid profile, according to a study published in the May 19, 2015, issue of the Journal of the American Medical Association. (See BioWorld Today, May 2, 2014.)
The agreement is the first of what Wave's president and CEO, Paul Bolno, told BioWorld Today will be a series of partnerships and collaborations to advance programs outside Wave's core focus on neurological and neuromuscular rare diseases, an effort headlined by the Cambridge, Mass.-based company's plans to file investigational new drug applications for its two lead programs in Huntington's disease by end of 2016 and a third exon-skipping program to treat Duchenne muscular dystrophy. Wave expects to move three more programs into the clinic by 2018.
"The Pfizer collaboration fits very nicely into our business model of saying, 'We're going to own our portfolio, but partner and leverage stereopure drugs in other areas with partners. For metabolic diseases, hands down, we don't think there's a better partner than Pfizer," said Bolno.
Wave's synthetic chemistry drug development platform enables the design and development of stereopure nucleic acid therapies which are optimized across multiple dimensions of pharmacology, including efficacy, stability, specificity and safety. The partners are starting out with two targets already selected from that platform, including Wave's apolipoprotein C-III program and a second undisclosed target. The remaining targets will be declared within 18 months.
Jefferies analyst Eun Yang, who holds a "buy" rating on Wave, told clients that it's worth noting that despite Ionis Pharmaceuticals Inc.'s APOCIII-L-Rx, which is expected to enter phase I during the second half of this year, Pfizer chose to work with Wave to develop nucleic acid-based therapies.
The up-front payment, together with Wave's existing cash, much of which was raised during the company's oversubscribed November 2015 IPO, will help Wave fund its operating expenses and capital expenditure requirements into 2019. Wave's shares (NASDAQ:WVE) gained 65 cents to close Thursday at $15.28.
Wave began operations in 2013 following the combination of two small biotechs, Ontorii Inc. and Chiralgen Ltd. Following substantial investment by SNBL Ltd., it secured an $18 million series A round from RA Capital Management LLC and Kagoshima Shinsangyo Sosei Investment LP in February 2015 and added a $66 million series B round in August 2015. (See BioWorld Today, Feb. 17, 2010, Jan. 15, 2013, and Feb. 3, 2015.)